Bolivia: The Saudi Arabia Of Lithium

Maybe we can cure our "addiction" to oil with electric cars, but replacing it with an addiction to lithium-ion batteries presents a similar problem.

More than half the world's supply of lithium--73 million tons--is in Bolivia, a nation run by populist Evo Morales. In anticipation of a growing need of lithium, many automakers reached out to the Morales government, hoping to invest in the country early, in order to secure cheap access to lithium for batterries. The Morales government turned them away.

Bolivia wants to be the nation that turns the raw lithium into batteries. It doesn't want to simply sell off its natural resource and miss out on a profitable opportunity. So how will this imperil the electric car industry?

Time: The core question is whether Bolivia's lithi-leverage will eventually drive up the price of those batteries, which can already add about $10,000 to the cost of a car. Experts say that as production of the lithium-ion packs increases, they're actually getting closer in price to cheaper but less effective nickel-based batteries. Still, a big factor will be whether the demand for them rises as much as anticipated. "It is difficult to predict just how many electric vehicles we will see in the market," says Jennifer Moore, a spokeswoman for Ford, which hopes to have its family of BEVs (battery electric vehicles) on the North American market by 2012. "Much depends on the speed at which battery technology progresses, but equally important, cost considerations related to lithium-ion batteries."

Acquiring lithium from Bolivia further illustrates that energy independence is a hackneyed political idea. We'll need to engage in trade, even with nations that might not like us, in order to create viable alternative energy technologies. And there's nothing really wrong with that.